Currency in NZD
Last close As at 25/03/2023
NZD3.41
▲ 0.05 (1.49%)
Market capitalisation
NZD352m
Research: Healthcare
AFT Pharmaceuticals has announced the online launch of a wider range of its over-the-counter (OTC) medicines in China following registration under China’s Cross Border E-Commerce (CBEC) OTC pilot scheme introduced in 2019. The products will be sold through AFT’s Kiwi Health Global Flagship Store on Tmall Global, China’s largest cross-border marketplace. The store was launched in 2020 and had been carrying a limited trial range of products until now. Following the recent registration, AFT has launched a number of new products in China, with further launches planned in the next few months, including its flagship pain relief drug, Maxigesic. The Chinese OTC drug market is the second largest globally (worth US$16.3bn in 2020) and we see the current development as encouraging, with potential to boost the company’s sales in Asia.
AFT Pharmaceuticals |
Expanding reach into China |
Product launch update |
Pharma and biotech |
8 July 2022 |
Share price performance Business description
Analysts
AFT Pharmaceuticals is a research client of Edison Investment Research Limited |
AFT Pharmaceuticals has announced the online launch of a wider range of its over-the-counter (OTC) medicines in China following registration under China’s Cross Border E-Commerce (CBEC) OTC pilot scheme introduced in 2019. The products will be sold through AFT’s Kiwi Health Global Flagship Store on Tmall Global, China’s largest cross-border marketplace. The store was launched in 2020 and had been carrying a limited trial range of products until now. Following the recent registration, AFT has launched a number of new products in China, with further launches planned in the next few months, including its flagship pain relief drug, Maxigesic. The Chinese OTC drug market is the second largest globally (worth US$16.3bn in 2020) and we see the current development as encouraging, with potential to boost the company’s sales in Asia.
Year end |
Revenue (NZ$m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
03/21 |
113.1 |
8.2 |
7.1 |
0.00 |
N/A |
N/A |
03/22 |
130.3 |
18.9 |
19.2 |
0.00 |
N/A |
N/A |
03/23e |
155.9 |
27.0 |
20.4 |
4.04 |
N/A |
N/A |
03/24e |
194.2 |
43.5 |
30.0 |
5.94 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Following registration under China’s CBEC OTC pilot scheme, AFT has become the first New Zealand company to sell New Zealand-registered OTC medicines on Alibaba-owned Tmall Global. Chinese operations will be carried out in collaboration with partner RooLife (an Australia-based digital marketing and customer acquisition service provider). RooLife will assist AFT in digital marketing, store operation and product distribution services to drive online sales according to the partnership terms.
AFT plans to expand its product portfolio in China in a phased manner. In the first phase, it has launched a range of health and wellbeing products including Vitamin C Lipo-Sachet, Vitamin D Lipo-Sachet, Ferro Sachet, Kiwisoothe, Crystawash Extend, Loraclear hay fever relief, and Histaclear non-drowsy allergy relief. The second phase, which is expected in the next few months, will include Maxigesic and a further five OTC products.
The progress of its Kiwi Health Global Flagship Store is an important step towards tapping the promising OTC medicines market in China, which is the second largest outside the US and is estimated to reach US$22.7bn by 2023. Importantly, AFT management notes that more than 58% of OTC medicine sales in China are generated online. Expanding its geographic presence online allows AFT to enhance awareness of its brand in China without incurring significant launch and distribution costs.
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Research: Metals & Mining
On 30 June 2022, Pan African announced that it had successfully completed a definitive feasibility study (DFS) on the Mogale assets that it is in the process of acquiring. Highlights from the DFS were that the project has the potential to increase the group’s gold production by c 50koz pa (or c 25% of current group production) over a 13-year life at a capital cost of ZAR2.5bn (US$157.8m) and an all-in sustaining cost US$914/oz, to result in a pre-tax project NPV9.5 of ZAR1,006m (US$64.9m, or 3.3c or 2.8p per share) and a real internal rate of return of 20.1% at a gold price of US$1,750/oz and a forex rate of ZAR15.50/US$. We have now incorporated the results of the DFS into our model, as well as updating our forecasts to reflect recent moves in the gold price and forex rates (only).
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